Can finance spur resilient food systems?

Kenya’s agriculture and food system is under enormous strain. Climate change, population growth, and land degradation are disrupting the rhythms that farmers and markets have relied on for generations.

In the face of these challenges, we must ask whether finance can help build food systems that are not only productive but also resilient.

For those of us working at the intersection of finance and development, it is a chance to reflect not just on how to mobilise more capital, but how to deploy it in ways that protect the systems we all depend on.

After nearly three decades in financial sector development, I’ve seen how finance can not only drive progress but also how it can falter when faced with systemic shocks. The pace and scale of change today demand more than marginal reforms.

Take the Covid-19 pandemic as an example. It revealed just how quickly foundational systems can come under stress: health services buckled, supply chains broke, and the food system — normally robust and self-adjusting — was strained to the brink.

Climate shocks are already disrupting agriculture with increasing frequency and severity. Floods, droughts, and unpredictable weather are no longer rare events, they are the defining phenomena of our time, and Kenyan farmers are on the frontline of these changes.

Finance, in its current form, struggles to address these challenges. It does not yet operate in a way that recognises the fragility, and opportunity, of food systems.

However, not all is lost. We know what can work in Kenya and beyond, promising innovations are being tested and scaled.

Experimentation to address soil health issues, including composting and reducing dependence on chemical inputs, is underway. To address biodiversity concerns, farmers are cultivating hardy local seeds and indigenous crops like millet, cassava, and yams.

Investing in cold chain infrastructure and local markets is ongoing to create efficiencies in storage and logistics and reduce waste. Water management activities like building sand dams, and swales, and recharging aquifers through simple earthworks are being implemented.

Read: Re-engineer Kenya agriculture finance to unlock potential

Finance can play a catalytic role by helping to link individual farmers to markets, strengthen cooperatives, and enable landscape-level investments in water, biodiversity, and soil. But it must be redesigned to reflect the realities on the ground. That may mean more blended finance, or better targeting of subsidies and engaging with the knowledge and wisdom already embedded in local communities.

As we rethink food systems, let us not focus only on the farm or the market but also consider the wider ecosystem, ecological and financial. There is still time to make this pivot, and we must act with clarity, courage, and urgency.

Agroecology and agroforestry approaches are being implemented, including integrating trees into farming systems. Regenerative agriculture is being put into practice by using cover crops, food forests, and rotational grazing to rebuild soil fertility.

All these ideas are being implemented by farmers, cooperatives, innovators, and nonprofits. What is missing is the connective tissue: coordination, policy support, and financing mechanisms that can match the scale of the challenge.

Ultimately, nature offers us a powerful ally. Regenerative practices can rebuild soil in just a few seasons, forests can return, water can flow again. But for this to happen, finance must align with the logic of natural systems and not try to override them.

The land suitable and available for cultivation is shrinking, from an estimated 13 percent of Kenya’s surface area in the 1990s to the present eight percent. Meanwhile, the population continues to rise, and with global temperatures creeping toward the 2°C threshold, we are moving into uncertain territory for food production.

The response, too often, has been to push harder on a failing system —more synthetic fertilisers, more chemical inputs, more extraction from already exhausted soil and water sources, leading to degraded land, declining biodiversity, polluted rivers, and a vicious cycle of lower yields and higher input costs.

When systems begin to fail, human beings tend to become more extractive. Farmers cut down trees for charcoal to supplement income; young people scoop sand from riverbeds for sale in far-off cities and lenders raise interest rates to hedge risk. Each response is rational on its own, but collectively, they worsen the underlying crisis.

All these ideas are being implemented by farmers, cooperatives, innovators, and nonprofits. What is missing is the connective tissue: coordination, policy support, and financing mechanisms that can match the scale of the challenge.

Ultimately, nature offers us a powerful ally. Regenerative practices can rebuild soil in just a few seasons, forests can return, water can flow again. But for this to happen, finance must align with the logic of natural systems and not try to override them.

The writer is the Chief Programme Officer at FSD Kenya.